Renewables Boom Is Recent And Sustainable: Why?

In all its forms--hydro, ethanol, wind, solar, biomass, geothermal, biodiesel--renewable energy will likely in 2011 provide more energy than nuclear power in the USA.  It is a big, booming business.

But the boom is recent, with a bit of growth starting in 2005, and then a rapid acceleration of renewable energy production commencing in 2007. Most of the sharp gains in renewable energy production have been since 2007.  For example wind generation will double from 2008 to 2011.  Solar generation will quadruple from 2009 to 2011.  Ethanol production is up sharply in the last 3 years.

According to the EIA, US renewable energy production has increased from 6 guadrillion British Thermal Units to 8 quadrillion from 2005 to 2010. That is a whole lot of energy, with growth continuing in 2011, and without which US consumers would be paying more for energy, imports up, pollution up, and jobs down.

By contrast, from 2000 to 2004 the amount of renewable energy actually stagnated, with even declines in some years.

What triggered the boom?

The combination of federal policies like the Renewables Fuel Standards and production tax credits for renewables as well as state renewable energy portfolio standards and similar policies around the world attracted significant private investment that drove economies of scale and innovation, creating a US and global boom in renewable energy.  Bloomberg New Energy Finance puts global renewable investment at $195 billion per year and projects that it will more than double over the next decade.

Certainly concern about loading the atmosphere with heat trapping gas and other pollutants from traditional energy sources partly is driving policy. But also there is an international economic race underway to win jobs and investment by gaining market share through the entire renewable energy supply chain.

While policy remains important, the boom is now fueling itself.  It is lowering costs, with wind and solar declines being remarkable and increasing power production, and building further momentum. US and global government support for renewables is being repaid with production of already large, still increasing amounts of cleaner energy and declining costs for the technologies producing it. 

Government policy is actually working.